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tv   Your Money  CNN  February 13, 2011 3:00pm-4:00pm EST

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than 200 towns. wednesday, italian prosecutors filed a request to bring berlusni to trial. they accuse the prime minister of paying to have sex with an underaged dancer. and some dramatic pirngts coming out of washington state where a massive fire spread to 20 homes before the fire crews were able to contain it. and it happened in white swan. crews say the fire started at one house and was fuelled by 40-mile-per-hour winds. i'm fredricka witfield, see you about an hour from now, "your money" starts right now. the recovery continues, but where are the jobs? i'm christine romans, welcome to "your money," ali velshi is off this week. if president obama is going to keep his job, he's going to have to figure out a way to get americans back to work. our measure of success has to be whether every american who wants a job can find a job. whether this country is still the place where you can make it if you try.
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>> michael steele is the former chairman of the republican national committee. michael, we saw republicans work with the administration to get tax cuts extended. and it resulted in quite a bit of positive momentum for president obama. what's the political incentive for republicans to unite with hill on job creation ahead of the november 2012 election? >> well i think the incentsive is that it gives the republicans an opportunity to speak with clairedy on their views on how jobs are created, where we invest in the private sector, not in government institutions. that put in place the various strategies whether it's tax cuts or reduction in spending on various areas of the economy. that will allow that growth to infest and grow. those types of conversations are important to have now. but the interesting thing for me is that we're two years into this administration. and that argument hasn't changed. it was the argument on day one. and so bringing in businessmen
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as chiefs of staff and all of that, that's great. it is the policy, the policy that will drive the job creation that the market is waiting to see. and that they can feel that they can take the risk going forward. >> let me ask david gergen about it, cnn's senior political analyst. david, all the signs that show the positive recovery are here. can the administration create the perception that its creating jobs to run on an economic record? >> it's been extremely hard. i think as much as they might enjoy the company of chairman steele, i think they would disagree with him, they inherited a situation where jobsy collapsing. and you know, it's very hard to create jobs the first two years. but i do think now that this is a year in which the president put forward in an agenda in his state of the union, that was about becoming more competitive and investing more in the future. and there's sharp disagreements, between what the president wants to do and what republicans believe is best for the creation
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of jobs. republicans believe in cutting taxes, cutting spending, and the president wants to invest. the president has got his budget coming up on monday. this is going to be a hugely significant event. >> harvard professor ken rogoth is the former chief economist of the imf. john boehner speaker of the house reminded everybody of the impending crisis that's not going away. >> everything is on the table. we're broke, let's be lons with ourselves, it's time for washington to get serious and that's exactly what the american people expect of us. >> ken, president obama says his budget requests, expected monday is going to call the bluff of everyone who talks a good game on debt reduction, but don't act. both of them talk tough about the deficit. but neither party has been capable of tough choices to date. ken, what about now, tough choices, are they leddy for it? >> i doubt it. i'm really very skeptical. i think with the election coming up in two years, it's going to
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be very hard to have the kind of dramatic change that we need. i think there's some good ideas on the table about improving our tax system. not just worrying about whether we're cutting it or raising it. but i don't see a lot of wholehearted momentum. maybe after 2012. >> michael, nearly seven in ten republicans say finding a nominee who can beat obama more important than choosing a candidate who agrees with them on every major issue. the primaries are going do heat up, unseating obama is going to be the goal in that environment. can a split congress and a democratic president actually tackle the issues so vital to the economy? >> i don't think so. i agree with ken there. i think that the hard choices that need to be made by this republican congress and this democratic administration will not be made. there's going to be a lot of fluff and blue smoke and mirrors, a lot of machinations. we're having problems with how we tackle the debt ceiling and
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whether or not we listen to the grassroots activists who empowered this congress to act to make the cuts necessary to move the economy forward. we can't even agree on that right now. i don't see the hard choices being maed realistically. it's going to take a nominee who is willing to risk it all. to make that, that first step, i think. >> it looks like you want to jump in there, david. >> i do. i think the test for the president's budget and the seriousness for both republicans and democrats, is whether they're prepared to reform the entitlement programs. >> right. >> starting with medicare, medicaid. social security. those make up well over half the budget. and i think what's been discouraging so far is that almost all of the controversy and all of the debate has centered on what's called the nondefense discretionary part of the budget. which is less than 15% of the total budget. you can't squeeze all of the spending out of there. you have to take on entitlements, and frankly you have to take on defense. i think bob gates is trying to prepare the way for cuts at
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defense. but they've got to be smart cuts. you can't do it just out of the so-called nondefense discretionary funding. you can't get from here to there, it's not serious. >> even though this week we heard that perhaps the president was going to try to cut the low-income heating assistance program and that was going to come under the knife on monday. and immediately there were people who from the northeast in particular who wra very upset about that. no matter what, even if it's not defense, even that 15% of the budget, those are still going to be painful choices, too. do people get it, do you think, that the way we live our life is going to be changing over the next 20 years, as we have to pay for what we've already spent? >> i think that's the problem for politicians is the voters don't get it ever since ronald reagan, who was incredibly charismatic and effective convinced people budget deficits don't matter, as long as markets keep willing to lend us, at really low interest rates, it's really hard to persuade people.
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i think in addition to what david said about entitlements, our tax system is a really bad one. it's a mess, there's some good suggestions, the president appointed the ball simpson commission, there doesn't seem to be any heart to implement them. >> i want it talk about the tax choices we have, too. the federal reserve chairman says he knows when we will see meaningful jobs creation and a true recovery. when will that be? next. let's get chinese.
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be truly established. >> all right. of the president himself, david said thatless some $2 trillion in cash that corporate america is sitting on. what does it take get employers to spend that money and hire? >> one aspect might be to go to what ken is talking about, changes in the tax code. there are particularly of that $2 trillion, a big chunk of it is overseas and corporations argue if you would let us bring it back and reinvest it and we don't have do pay the high rates when we come back, we're more likely to do that. i think that's worth exploring. you'd have insure somehow it doesn't go into dividends, but actually goes into investment. and then there are other questions about lowering the corporate tax rate. but overall christine, i think that is a larger problem and i would look to ken's wisdom on this. we have a, seem to have a structural job problem in this country. that hit us before this great recession. back in the 1980s, i was looking
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at this the other day, in the reagan years, over 20 million jobs, clinton years over 20 million jobs. since 1999 coming up to today, net new job creation in this country is dero zero. zero. >> ken, why is that? three successive administrations have pursued policies that have sparked globalization. meant that companies don't necessarily, the interests of a corporate america is not necessarily coupled preprecisely with the interests of of the american workforce. >> it's certainly in the case in the huge recession we've had, employers have been really relentlessly pruning jobs and finding that their profits are bigger, that they're more efficient and they're looking at investing in overseas. some of it may be coming back. i think david is right, that in president obama's state of the union speech, he laid out the future. unfortunately, it's not going to happen overnight. we need to invest in our people. and education, not just primary,
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but at all levels, adults. of course infrastructure. but especially we need to invest in our people or we will not be able to compete. >> and what about cutting, ken, the corporate tax rate? right now at 35%. although we know with all the loopholes, a lot of companies don't pay 35%. the president has said he would consider lowering the corporate tax rate if he got rid of all the loopholes is that a good, will it create jobs? >> explaining the corporate tax rate is so complicated, but basically we tax our profits over the whole world. and we're about the only country that does that. that's a problem. and we have a very high rate within the rich countries. and it needs to come down. but you've got to close the loopholes. it has to come, the two things together will give you a lower rate. but the loopholes go away. >> michael, the president reaching out to business. it's interesting, he spoke to the chamber of commerce. he said i'm going to make it up to you. he was sort of joking when he said that. and somebody over at trade watch said had is the president going
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in front of the international club of job outsourcers, how is this a solution? is there something the republicans understand about getting businesses going and having an agreement here between the president and business that maybe liberals don't get? >> i think so. in that context. and i think that comment is part of the poisonous environment that makes up an entrepreneur or job creator hesitate. but i would say it's not just what we do on the tax side of the equation. it's also what we do on the regulatory side of the equation. that combination of taxes, whether they're too high or too low, the rates that corporations are paying, you know, certainly impacts the ability to create jobs. but then the regulatory burdens that come with the various policies out there. that combination, when you look at something like health care for example and the hesitancy that the business community has with respect to their employees, also weighs into this. so i think it's a holistic approach to our economic environment, that the administration and the congress need to be serious about.
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you just can't fix one piece of it or think you are, and that's going to take care of everything else. it is a comprehensive effort that the business community is looking for, from both the house, white house and the congress. >> but, david, you know, the optics are still pretty. a lot of the companies have offshored an awful lot of jobs, we've documented it over the years and now the president is saying almost a jfk moment, ask not what your country can do for you, but ask what you can do for your country and 48% of their profits are from overseas. >> i'm not sure that you can rely on the patriotism of american companies as a way to fix the job problem. >> yes, you can! >> i would love to think that. but i've had conversations with people at walmart who have been very patriotic and they've been, they've made big efforts to keep their suppliers inside the united states. have those jobs that supply things to walmart. come from that. and you know, over time, the companies have just left. and i think we have 6,000 suppliers in walmart, 5,000 are
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in asia. that's where the jobs are. >> you talk about the structural job change, that's part of it we see every day. so ken rogoff then, we talked about ben bernanke, it's going to be years before the jobs come back. what does it mean in the interim, then, politically and economically for people in the middle who are worried about a debt crisis down the road. who are worried about getting a job. who are worried about the value of their home. are we in this limbo here between a financial crisis and between maybe a lower standard of living later? >> christine, at least we're in limbo. i hope we don't have a lower standard of living later. people don't have jobs, people are nervous about their houses, they're anxious, they're tense, they're angry. i think it's a very volume dill mix. i do not know how this is going to play out in the next two years. i certainly defer to david and michael on that. it strikes me, there's a lot of room for populism to come in here amidst all this anger and
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uncertainty. >> and i still don't know what the political impact, david, is going to be of those 99ers. those people who have been out of work for more than six months now they're running out of 99 weeks of unemployment benefits. whether they'll be dash you know, whether they will be a political force. that's something we just really don't know yet. unfortunately the soccer moms of eight years ago, become the 99ers of this time around. maybe a subject for us to tackle another time. michael steele, david gergen and ken rogoff, i can't let you go without congratulating you for winning the deutsche bank prize, the origin of crises. next, what will it take to get them back together and what happens to job growth, if they don't.
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by all accounts, we are in a recovery, but don't tell that to folks in the middle class, who are feeling anything but a bounce-back. president obama addressed the problem in a speech to the chamber of commerce earlier this week. >> they see a widening chasm of
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wealth and opportunity in this country and they wonder if the american dream is slipping away. they wonder if the middle class rather than expanding as it has through our lifetimes, is in the midst of an inexorable contraction. and we can't ignore these concerns. >> christine vreeland is a writer for "the atlantic." he's saying they have these concerns are the concerns real? >> absolutely, it's not just perception. what's actually happening not just in america but in most western industrialized countries is an increasing income gap. we're seeing the people at the very, very top, 1% do incredibly well from globalization and technology revolution. with the middle class getting
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squeezed. unemployment is real. >> robert cutner is the corps editor "american prospect." there's a sneaking suspicion that american workers have been delinked with the success of corporate america and american business. is that true? and is it permanent? >> well, it's certainly true and it's certainly the result of the business model that american business currently pursues. and unfortunately, that is abetted by the trade policy practiced by both political parties. which is to say, make whatever deals you can make with whatever countries are offering you. subsidies, low wage workers. a little bit of arm-twisting, as the chinese do. and if you can profit if that, god bless you. i mean in the '50s, engine charily wilson, the head of gm was ridiculed for saying what's good for gm is good for america. there was some truth for that in those years. i'm not sure you can say what's good for ge is good for america. because ge has been moving most
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of its high-level as well as low-level jobs overseas and making a separate peace with china. >> but the how to work with business to make sure that the american middle class isn't left out? >> yes, and isn't that unfortunate. if anything, jeff immeldt is the poster child for the wrong kind of business model. >> let's bring in richard quest. safeguarding american jobs, doesn't that mean protectionism, tariffs, going away from free trade? what can the president do? >> well, the first thing do understand is that whatever the economic situation, certainly in bad times, it's always the middle class that's going to get the down side, if you like. it's always the middle class that's going do get it. they will be the ones that will lose their benefits. they will be the ones that will feel tax rises the most. they will be the ones that will
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be clobbered first and hardest for one very simple reason -- that's how you make the most money and the biggest savings. by removing their tax benefits and increasing their taxes. you don't do it at the bottom and you don't do it at the top. you do it by clobbering the middle classes. because they are the large number. the second point on the question of whether or not protectionism is the way forward, well, you don't believe that any more than your guests do. the reality as president obama has said, america has to compete. you can whine and winge about unfair trade practices as long as you like. but at the end of the day, you've got to compete. and that means making the products at the prices, in the markets where people will buy them. >> the markets where people will buy them. those markets are somewhere else. chrystia there's a nagging concern that the global super-elite have written off the workers, that the privately it's about making as much money as
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they can from rising middle classes in other places. is that the conversation among the super elite who you write about? >> look, i think that's what you have to do right now to make money. you know, jeff immeldt, who i'm a fan of his, i think it's great that he's advising president obama. he gave a speech at stanford business school last year. where he said for most of his career, the growing markets were in the developed west. since the 1980s and actually when i interviewed him recently, he said the real turn was 2008, the real action has been in the emerging market economies. that is where the growth is and that's where business has to the paradox is you have to want business to do that. if they don't go to the emerging markets, the products will fail. what president obama has to address is to find a way to get the super elites which are doing fantastically well, globalization is terrific for them, to get them to invest frankly with their tax dollars,
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in the rebuilding of america. >> but super elites don't vote for the president in 2012 and they don't vote for congress and it's congress where there's the real concern about what to do. robert, what does obama need to do to help the middle class, to help the middle class weather this recovery and enjoy this recovery? >> well the super elites may not vote, but the super elites fund campaign and that's why they have so much disproportionate influence. i have to take exception to theyed that it's always the middle class that gets whacked. the middle class was getting whacked long before the recession, this is a 30-year process of the income distribution becoming more unequal. we need to turn it around and need to persuade congress to invest in america and the skills of workers and have a different trade policy. that's not protectionism. germany has the highest wage class in the world and it has the highest export surplus in the world because german elites care whether they still make things in germany. american elites don't seem to
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care that we downed obama needs to reach out to public opinion, as well as the chamber of commerce to change those perceptions and those goals. >> last question to richard quest who is going to throw his pen into the camera. >> well just look at the way germany handled the great recession. it didn't lay off employees, it put them on short time. it did paid holidays, it did all sorts of things, it drove down the cost space so that when the recovery came, german industry more than any other in europe, was ready to take advantage of the growth that was coming. so robert is quite right. but one other thing, the question of infrastructure, is fascinating. look at the victorians, look at the last century, they built bridges, they built tunnels. they built roads. they actually built something that we're still using today. in new york, they can't even get the tunnels across the, under the hudson.
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you can't even, you can't even get agreement on a fast rail network. and in britain, we're having exactly the same problem. >> two seconds, chrystia. >> i agree with richard and robert about infrastructure and investment. but someone has to pay taxes for that to happen and americans across the political spectrum seem to not want to do that. >> only in the top 1%. >> richard quest going to stick around where he can throw things and say victorian as many times as possible. thank you, everyone. the education of our children, is it getting worse, is it getting bet centre was it ever any good? we're drilling down on educating america, next. but first, stephanie elam finds out how a st. louis shop has stayed in business for nearly 100 years and found a sweet spot in a rough economy. despite wars, recessions and urban flight, crown candy has
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been an anchor in the old north neighborhood of st. louis. >> we've been on this corner in this same location for the last 98 years now. >> the shop looks about the same as it did when it opened in 1913. >> when you come here, it reminds you of an old-fashioned soda shop. >> and it churns out an array of desserts. >> we do all the solid chocolate figuri figurines. we make the ice cream and the butterscotch. and foodwise, everybody talks about the blt. >> when you have a sandwich on bread this thick and you have it piled on with bacon and turkey and cheese, that's it for me. >> in fact, the sandwiches are so large, you doubt most people would finish them. not the case, says andy coranzif, the founder's grandson who runs the shop with his brothers. >> for the most part nothing gets wasted around here. >> and the following is huge. >> we've got everybody, all ages, all demographics, three or four generations of customers
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that come in. it's, it's just a constant stream of diversity. >> it's not just coming from place to eat. it's an experience. >> but in the '70s, the customers weren't coming. >> my dad would dell me that some day we'd have two or three people for lunch. that was the worst he ever saw it. >> instead of closing shop, crown candy kept on cooking. >> what has been the secret to crown candy's success? >> my father said, you give people a good quality product and you take care of your customers, and they're going to come back. >> and they did. these days, crown is taking its nostalgia to the internet to beef up business. >> our christmas sales have doubled. we got people ordering from all over. we're learning how to kind of promote in a whole new way. >> andy's also up for competition. >> i love to see another restaurant, maybe we'll get some exposure and people will come down and we'll get some new customers, too. >> dmu customers that could become yet another generation of crown candy fans. stephanie elam. cnn, st. louis, missouri. [ female announcer ] the healing power of touch
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u.s. used to lead the world in education and now is dropping, right? it might be what you believed. but a new brookings study says otherwise. it reports the u.s. never outscored the world in achievement tests notice first place. back in 1964 the u.s. ranked 11th out of 12 countries on the first international mathematics study. since then, the study says our country's performance has remained steady or even shown slight improvements. steve perry cnn's education contributor. steve, there's a perception that our education system has gotten worse, that we're slipping behind. was it ever good in the first place? or are these rankings meaningless? >> i don't know that the
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rankings are meaningless, because they do give us an indication of what's happening in the economy. when we look around the country, we see that children are struggling academically. whether you look at domestic measures, whether the state examinations or international measures, such as the piza exam, there are very few examples of our students doing well. 72% of students are performing medium. whether they used to do well, i think sometimes nostalgia kicks in and parents think they're smarter than their kids are. >> michelle rhea is the former superintendant of washington, d.c. schools. we have to turn to the future for answers and come up with new ideas? >> that's absolutely right. i mean if you look at any measure of the past in terms of how we've done in education, in the u.s., i think what we're
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going to find is failed programs and failed strategies and so what we need to do is figure out what we need to do to move forward. in the right way. and i think the research is very clear. that the number one in-school factor that dictates whether or not student achievement is going to go up or not is teacher quality. that's really where the focus needs to be. we also need to insure that parents have good information and that have choices so that we never have family who is are trapped in failing schools. and we also need to look at, take a hard look at where we're spending the dollars. especially right now. in these tight budget times. we have do make sure that the dollars are going to programs and strategies that work. >> i wonder, i want to ask both of you to tie it up for me. i think trying to compare our education system with the rest of the world in some cases doesn't make any sense, because sometimes you can be the best in science and math, but if you don't have any opportunities to innovate in the economy, it doesn't matter. in this country, even with some of the rankings we've seen, it has been a leader in innovation, it has been the leader of new
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ideas and companies because of the political system and other things. should we be looking at ourselves and comparing more locally than that, within states and within districts and within towns instead of comparing ourselves to the rest of the world? >> no -- >> go ahead, steve. >> i think we do have it take in a consideration, the fact that our children are competing in seats in colleges. 40% of the ivy league is seen to be asian. if you look at black people who go to college, many of them are not african-american. they're at least one descendant away from another country. we have to be honest with ourselves, and more simply. call tech support. where are you going to be speaking to someone? right now, in our economy right now in our everyday lives, the impact of failing schools is taking shape and we need to own that. if you don't believe the tests or anything else, look at what you see before you. go to places in which there's a
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high technology concentration and see who's working there. go it places where there's high math concentration and see who's working there. and then look at who we're sending out to the rest of the world. >> michelle, you get the last word. >> it's absolutely right. look, part of what we need for a healthy economy is to have those ideas. we need to be innovating, we need to be developing new patents, that's great. and if america is good at that. that's part of the equation. but we also need people sh, engineers do actually build the machines that the patents are about. we need people to actually be implementing the innovations that people are coming up with. we're going to have over 123 million high-skilled, high-paid jobs in this country over the next 20 years and american schoolchildren will only be able to fill 50 million of those 123 million jobs. because our kids don't have the skills that they need. we're going to be exporting all of those jobs. and if you look, if you look at our economy and how it's doing
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compared to those other countries. they're going to be kicking our tails. >> kicking our tails. we'll leave it on that, steve perry, senior education contributor and michelle rhee former washington, d.c. schools commissioner. we'll talk about more solutions soon. do we have enough oil. new concerns about how much oil is out there. how credible is this and what it could mean for oil prices going forward. so you get the same coverage, often for less. wow! that is huge! [ disco playing ] and this is to remind you that you could save hundreds! yeah, that'll certainly stick with me. we'll take it. go, big money! i mean, go. it's your break, honey. same coverage, more savings. now, that's progressive. call or click today. what do you see yourself doing after you do retire? client comes in and they have a box.
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saudi arabia's oil reserves may be grossly overstated. and that's according to a u.s. diplomatic cable obtain by wikileaks and published in a british newspaper this week. the cable site's statements from a former head of a state-owned saudi oil company claiming that saudi reserves have been overstated by as much as 300 billion barrels of speculative resources or by about 40%. richard, it's the world's largest oil producer. we've seen oil prices increase as tensions grow. egypt is not even an oil
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producer, oil exporter haxt does . what does it mean? >> this report from wikileaks came out and oil bare i had budged. it's the report in the diplomatic cable is all to do with the difference between proven oil reserves of several hundred million barrels, versus this 900 that of course the report, that saudi has always said they have. and what the difference of course with make a huge spike in oil prices. if it were true. but it is speculation and if you read what the diplomat actually wrote, there's been an enormous amount of questioning about what saudi's reserves actually have. and frankly, even the former saudi oil minister believes that perhaps it's time to have a proper reckoning on what saudi has got under the ground. >> i want to bring in pete dominick, host sirius xm stand
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up. hundreds of chipotle workers were let go after an immigration audit. immigrations customs enforcement focused on chipotle's paperwork. focusing more on paper audits than the very unpopular workplace raids. more than 2,000 of these audits conducted in two 10, opposed to 500 back in 2008. the company told me these jobs were paid above minimum wage with benefits, there's no worker shortage for these jobs. it's interesting because this particular illegal immigration story doesn't seem to fit conveniently that these are low-paying jobs that americans won't do. and company told me that some of these jobs, all of these jobs, the workers had access to health care. they could buy health insurance and they could contribute to the 401(k) if they signed up. so it's a wrinkle in that whole thing. >> it's hard to find out who we're supposed to be angry and who we're supposed to demonize and make the villain in this
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story. these people, some of them if they're making that kind of lower wage, that kind of job, they're probably between the ages of 16 and 25. even if it is a little higher than minimum wage and they do get benefits, they're still probably hovering around the poverty line. these people probably didn't come here on their own. maybe, we don't know about the people that may have been illegal and so it's hard to demonize them. what we learn here is that the bottom line christine is we need a pathway to citizenship and i think in this case, the dream act might have affected some of these people. >> you look at chipotle it seems that they were doing most of their responsists above-board. most americans agree we should go after the employer rather than the employee in these cases. when i did my research on chipotle. i found out what they should be doing is advertising that they treat the animals, the pigs and the chickens pretty well. and the steak. i'm going to eat there more now after learning this. >> it's a company that prides themselves on being socially responsible and socially
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responsible -- >> food with integrity. >> food with integrity is what they say. i'll tell thaw a spokesman for the company that said, we're going to let them go, they're going to go down street and get a job someplace else. now there are audits under way in virginia and d.c. and they'll likely have to let go workers there as well. richard, the bottom line is quite frankly in this country. even though you've got jobs that are down and you don't have so much illegal immigration because the economy has been so weak. we do have 9% unemployment and you have unemployment of america's youth, 25%. there are some people who say wait a minute, there are a lot of people out of work, shouldn't we be enforcing laws. >> the reality and unsavory part of illegal immigrationings is quite simply this, there are jobs that some people will not do. there are jobs that -- >> but that's not the case in this country. this one doesn't work in this case. >> i don't agree with you. i don't agree with you.
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because if it was -- >> you don't want, you don't think americans want to work at chipotle and get health benefits and a 401(k). >> i'd like to ask about richard's citizenship at this point. i'm wondering about you, sir. >> the fact of the matter is at the end of the day, the restaurant chain went for those workforce because they were the ones that were available to it. >> that's not so, christine did the homework on it. >> i talked to the company. >> these people weren't necessarily -- there's a lot of people who wanted these jobs and it's hard to know. >> they're filled, it's fine. it's a question of -- >> i know, hang on, they're the ones that were doing the job. >> they were verified. they used the system. they thought they were being above-board. the chipotle management in this case. what more can they do? >> they say they're going to continue to try to use this e-verify system. they went twice through the process of verifying everyone's paperwork and the paperwork was verified. the assumption it was either
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stolen or, there was a mismatch of social security numbers. >> what do you have against burritos i think is really the thrust of the question here. hmm? >> when you have in any society, when you have unemployment at these sorts of rates, 9% or 10%, 7% or 8% in the european union and you have people like ben bernanke coming out and saying there's going to be no massive reduction in unemployment any time soon -- i'm paraphrasing what the chairman of the fed said, every job in every case is going to become a fighting row. and whoever ends up with it, whoever, under what circumstances, under what pay packet, that's going to be controversial. >> whoever has got the job is going to want to keep the job because someone's got a family to feed at the other end. that's clear. one thing we can probably all agree on is the government focus from workplace raids to a document audits is a little less intrusive to families. although many people evolved in the case say it was pretty intrusive, anyway.
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richard quest, thank you so much. always nice to see you. pete dominick, with certificasi up. is motrin pm.
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trade commission-free for 30 days, plus get up to $500 when you open an account. the cover of "fortune" says it all. the headline "the bomb biz." if political turmoil makes you nervous, might want to keep your eye on and invest in the defense sector. right to the point. you have two funds you like. first one, fidelity select defense and aerospace portfolio. why do you like it? what's in it? it's up 16% over the past year
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and up again in january, beginning of february. >> well, christine, it's a very well-managed fund. it has a four-star rate ago cording to morning star. when you look at its holdings, it's extremely well diversified which i think investors need in this environment. if you go beyond the last 12 month, its long-term record is solid. three, five and ten years have looked well versus the s&p 500. as i said, i think for everybody in a portfolio, should be a little defense stocks and aerospace because they acts like gold but much less volatile. second, etf. ppa. ened it's a, what we call a passive fund in the fact that it invests in all the security and the defense and aerospace sector. >> that one's ppa, power shares and aerospace. the beauty of the etf and
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includes all the companies in the category. >> exactly, christine. people don't have to worry. if they like the aerospace and defense area, this is the place to play it without worrying about an individual stock versus the whole group. >> no time to talk about expenditure cuts. maybe not a good time to invest in the secretary budget cuts under the nifr and maybe pentagon budgets under the knife. less money to spend on some of these companies. >> you're right, christine. no question the budget's getting an additional scrutiny. i guess i'm a little more sanguin. the fact you can reduce unemployment 1 percent aft points, back into the government in different ways. in terms what's going to happen in the future, obama says he'll look at these items and make sure he can tighten up the budgets. defense is still going to scale away with it.
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i've heard this several years now. i think they're going to continue to spend. >> thank you so much, ned riley. riley asset management coming to us i think from orlando. much nicer there than it is here in this very wet and cold northeast. >> i agree. no question about it. >> take care. so many people say retraining is the answer to america's jobs crisis. there's one problem. retraining doesn't seem to be working. i'll tell you why, next.
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a question for you. have the fortunes of america's middle class be delinked from corporate america? no 34matter where you fare, yes or no way.
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one thing is clear. people skill dos not match the jobs coming back. from the white house, from business leaders, from teachers, journalists, you've heard it 1 hadn't times. to be relevant in a global economy retraining is essential. but how? and to what? fact is, we don't do retraining all that well. the government accountability office this week issued a stunning report detailing the overlap administrative bloat and tanglement of government retraining programs. verdict, after $1 billion taxpayers dollars spent, the effectiveness of all of these programs is unknown. 9% unemployment. 6 million out of work six months or longer. youth unemployment 25%. depression levels for anyone under 19. retrained to be relevant, technology and global competition is changing faster that workers' skills and their families can keep up. ta means in a global economy, you are on your own. and


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